Xcite Energy Resources

Exciting prospects

As one of the more mature areas of the oil and gas market, innovative new thinking is increasingly being applied to the North Sea UK Continental Shelf to develop those more challenging reserves that still remain untapped.

Established in 2003, Xcite Energy Limited, through its wholly owned subsidiary Xcite Energy Resources Limited (XER), is focused upon the appraisal and development of heavy oil resources in this region. Initially, this is centred around the Bentley field in Block 9/3b in the UK North Sea.

Work has progressed well in determining the commerciality of this field with the drilling and testing of the 9/03b-5 well in 2008, and then the 9/03b-6 well and horizontal sidetrack 9/03b-6Z in 2010. XER’s achievement in defining the central area of the field meant that at the end of 2011 AGR TRACS upgraded the estimated field reserves at a 2P level from 28 million barrels of oil to 116 million barrels.

In the last year, XER has continued to expand its corporate office in Guildford in order to accommodate the intake of new key skills and expertise in project management, HSE, project services and engineering ahead of the first phase of development. The company has also moved its operational office from Banchory, Scotland to Aberdeen to improve access to technology partners and contractors.

When creating the development plan for the Bentley field, XER decided to break the first phase into two steps, 1A and 1B. This enabled it to make the financing of the project more straightforward and the project implementation more efficient. As such, phase 1A is now fully underway with the Rowan Norway deepwater jack-up unit being used to drill the 9/03b-7 and 7Z wells in preparation for the pre-production well test in the second quarter of 2012.

“Phase 1A is all about gathering information,” explains Charles Lucas-Clements, director of strategy and business development for Xcite Energy Limited. “This is not about trying to achieve a particular flow rate, but an intention to gather information to create a better model that proves how the field works. The pre-production well test will enable us to look at how the production profile for oil and water develops over an extended period of time. It also allows us to fine tune the reservoir and field production model by measuring reservoir and fluid properties over a wider area of the field.”

Through phase 1A, XER can also make phase 1B more flexible and expandable with the inclusion of a 12 to 15 slot wellhead tower in the configuration. This allows it to remove a number of constraints from the original design, as well as a better transition into the following stages of the project. Long-term the other benefit of this phased development is to provide XER with better opportunities to study enhanced oil recovery techniques and potentially to test a few ideas at an early stage, in order to unlock the whole value of the field in a reliable and progressive way.

XER is aiming to complete the flow tests of phase 1A during the fourth quarter this year, and once the results of this analysis come through will be looking to progress with production. “We are busy carrying out design and foundation work, from both a financial and technical perspective, in order to bring together a programme of development, part of which is achieving final FDP approvalas soon as possible to allow phase 1B to be implemented,” highlights Charles.

Heavy oil fields such as the Bentley field, are generally considered to be challenging, and to a certain extent unpredictable, therefore XER’s work on how to develop these effectively is of keen interest to the rest of the industry. By utilising the technical expertise available, XER has been able to overcome the traditional concerns to predict good commercial flow rates for this more unconventional type of reservoir. “We are opening up an area that people didn’t expect to be available,” agrees Charles. “There are an awful lot more reserves of this type in the North Sea and elsewhere in the world, so the way we are approaching this is applicable to these areas and challenging oil production in general.”

XER is essentially an appraisal and development company. Its core skills lie in putting a project in place by drawing upon the expertise of the company’s staff team, which enables it to anticipate and react to any unexpected occurrences. “At the end of the day, what we are doing is to transform challenging resources that have a low value into something that has a marketable value,” he concludes. “The IP we have developed here is a repeatable methodology, and as such we are already looking at potential opportunities in the future to create value. We are looking to develop Xcite into a partner of choice in terms of heavy oils and progressing projects through their challenging implementation phases.”

Xcite Energy Resources
Services: Exploration and production